Monthly Archives: March 2011

I’ve been busy lately, and haven’t been participating in the Health Wonk Review. Fortunately, others have kept it going without me–imagine that! This time around, in honor of the start of baseball season, Jason Shafrin–the Healthcare Economist–presents the “Opening Day” edition of HWR. It is overflowing with wonky goodness. Check it out here.

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If you’re tired of reading the blog in the same old way, you should try this. Then use the pull-down menu to select different views. It isn’t necessarily user-friendly (well, sidebar is pretty good), but it sure is different.

Now, you might be thinking “Of course it’s fiction. It’s a television show.” That’s true, but as Holtz lays out at the beginning of the book, people’s perceptions of reality are significantly altered by what they watch on TV. For instance, I’m guessing that few of you who read this blog have actually been present during the performance of an autopsy. Yet, if I asked you to describe to me what an autopsy room looks like and what happens during the procedure, many of you would begin by describing a dimly lit room. Having been present at a number of autopsies, I can assure you that the room is brightly lit with harsh fluorescent lights. My description would be based on reality. Yours, influenced heavily–in fact almost entirely–by shows like Bones and CSI.

The material presented on TV also has the potential to be informative, however. As Holtz describes, accurate information about diseases, tests, procedures, and even ethical issues, can actually educate viewers, and this seems to be at the heart of his book. A lot of people watch House and other similar shows. Holtz’s goal is to help them understand which parts are accurate reflections of the practice of medicine and which parts are nothing more than entertainment.

He covers everything from what actual physicians think about Dr. House, to how addiction is identified and treated in physicians (House being well-known for his Vicodin habit). He also talks about how decisions are made, how the hospital administrator-doctor relationship works in reality, and what happens when doctors make mistakes. Now, a lot of the points Holtz makes are of the “Well, duh” variety, but there are a lot of interesting insights in the book as well, and it’s a quick enjoyable read. It won’t be long before the warmer weather gets here and many of you will be headed to the beach or the pool. I’d encourage you to pick up a copy of Holtz’s book and read it there. Like a good episode of House, this is a book to be enjoyed, not scrutinized.

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With all of the back-and-forth over health reform, it sure would be nice if we knew just how things would turn out as a result of the new law. After all, if we could demonstrate with some certainty that it would actually do a lot of good for a lot of people, some of its detractors might be silenced. At the same time, if it looked like things weren’t going to pan out, then perhaps the law ought to be repealed. Unfortunately, predicting the future is a difficult thing to do, but that doesn’t stop us from trying.

Enter Mark Hall, a professor from Wake Forest University, and Matthew Buettgens, an analyst at the Urban Institute. Using the Urban Institute’s Health Insurance Policy Simulation Model, Hall and Buettgens attempt to predict the future of the uninsured under health reform. Such simulations rely heavily on assumptions, and some of the assumptions are stronger than others. HHS is still writing regulations, for example, so what exactly those may contain is still a pretty open-ended question. But there is evidence to support some of the assumptions. For example, we can look at the experience of states, like Massachusetts, that have passed a similar law to see what has happened there, and we can base our assumptions on a body of prior research and theory that can help predict how people will respond to a variety of incentives.

Of course, this is where the mutual fund disclaimer enters: Evidence of past performance is not a guarantee of future returns. That’s certainly a valid caution, but when it comes to predicting the future, the past is often the best information we have. In fact, it’s the only thing we know with certainty. Anyone who makes claims about what will happen that aren’t based at least in part on what has happened before, may as well be blindly throwing darts.

Now, I’m not going to delve into the details of Hall and Buettgens’ work, for fear of losing some of you along the way, but you can read their report here. The take-home message is simple: Health reform will cover most, but not all, of the currently uninsured. Among those who remain uninsured, a little more than one-in-five would be undocumented immigrants who are exempt from the individual mandate and ineligible for federal assistance. Another two-in-five would be Medicaid eligible, but not yet enrolled, underscoring the importance of outreach and eligibility assistance efforts. Of the remainder, some would be exempt from the mandate for a variety of reasons, while others would be subject to the penalty for not having coverage, even though many of them would be eligible for a federal subsidy of their premiums.

Overall, health reform will lead to a reduction in the number of uninsured, but the full effect will take time as people will have to be educated about their options, purchase coverage, or be enrolled in Medicaid. It would be interesting to look at a multi-year projection, to see how reductions in the uninsured change over time as implementation rolls out. It’s pretty safe to assume–based on the experience in Massachusetts–that even a decade after full-implementation, we still won’t have reached everyone, for a myriad of reasons. But that’s to be expected, and shouldn’t dissuade the effort. After all, in two states I care about, Georgia and North Carolina, Hall and Buettgens project that the proportion of the population that is uninsured will fall by 12.6% and 10.4%, respectively. But percentages are a statistic. Numbers are people. And combined, nearly 2 million Georgians and North Carolinians will gain insurance coverage in the first year after health reform is implemented. With results like that, I personally cannot imagine repealing health reform.

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We are inundated with technology. For the most part, that’s a good thing, or so we think. But lately, there’s been a good deal of talk about how technology is negatively affecting our intelligence and our social interactions. I also think it has shortened our memories. There’s just too much information out there–and we are bombarded with it at too high a rate–to be able to retain much of it for long. The GOP seems to be counting on that.

At home, we forget that things got so bad in this country that a majority of us clamored for “hope and change”–it took 8 years for us to get to that point–and only 2 to do a complete 180-degree turn-around. And now, with the GOP in control of the House, we may applaud their efforts to rein in spending, but forget some very important lessons. I’m not opposed to fiscal responsibility, but there’s more to that than just cutting money from the budget. There’s a right way and a wrong way to do it. If you have a blockage in your heart, you need angioplasty, not a below-the-knee amputation. Cuts for cuts sake can make things worse–not better. We need to be strategic in how we reduce the deficit. Politicians are masters of strategy. Certainly they can figure this one out.

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Some of my favorite critics of health reform are fond of appealing to charity, rather than government, as the solution to the problem. There’s a notion of personal liberty in there somewhere. Something along the lines of: “I should be free to give of my resources charitably as I see fit. I should not be forced to have a portion of my resources taken from me by government taxation and redistributed in ways that I may or may not deem appropriate.”

Okay. I can agree with that. Well, to a point anyway. The problem is that people don’t thoroughly think through their positions. Sometimes this is of the blatant “Keep the government’s hands off my Medicare!” variety. Other times, it can be more subtle. For example, people rarely consider that those things that are tax-deductible or tax-exempt are actually being subsidized by the federal government. I guess that may stem from our tendency to be self-interested, and consequently to view the tax-deduction as a way to reduce the bill we, ourselves, have to pay. However, we’d do well to remember that every equation has terms on each side of the equality sign. Your savings is someone else’s loss.

This is true no matter what is tax-deductible. If it’s a deduction for making energy efficient improvements to your house, the government is subsidizing that. If it’s the fact that your health insurance benefits are paid with “before-tax” income, the government is subsidizing that (to the tune of $250 billion it turns out). And, of course, my charitable friends are able to deduct those contributions to the American Cancer Society, Habitat for Humanity, even their church tithe, on their income taxes. If you’re a couple of steps ahead of me, you’re realizing that that means that the federal government is subsidizing places of worship. So much for the separation of church and state people love to rally around.

What it comes down to is this: If you really want your charity to be charity. If you really don’t want the government telling you how to spend a portion of your money. You’d do well to advocate for such things as discussed here to lose their preferential treatment in the tax code. After all, as it stands, some portion of your tax dollars are going to support the subsidy of someone’s favorite charity, which you may not support at all. Of course, if donations to charity were no longer tax-deductible, something tells me that we’d find out quickly just how charitable our nation truly is.

Note: This post was inspired by a fairly recent post by Princeton economist Uwe Reinhardt.